Chancellor George Osborne announced that there will be changes to the UK pension system henceforth. The new pension rules will probably affect millions, particularly those receiving higher retirement incomes.
The principle changes concern two points, lifetime allowance limits (the maximum that can be saved) and annuities.
The new rules provide for a change from £1.25m to £1m maximum lifetime allowance. This change is accompanied by other changes that will allow pensioners to receive their pension as a lump sum (or simply make withdrawals) and therefore doing away with the necessity of buying an annuity. The change should only affect less than 4% of the population, i.e. those with the highest earnings (some consider this a punishment for those who save well, though both Labour and Liberal Democrats supported the policy), it should, however not effect the vast majority of citizens and, a provision that sees this limit being able to increase (in line with inflation) should reduce its overall impact somewhat.
The other change concerns annuities. The chancellor also enacted measures that permits the selling of annuities. Starting in April 2016, tax rules will change in such a way that those who already receive an annuity income can sell it to a third party.
Profit from the sale can be reaped immediately, or simply in payments (with a marginal rate tax).
Again, new pension rules may or may not affect you depending on your earnings and annuity. It would be best to consult with a financial advisor before making any serious decisions about which direction to pursue.